President Obama Signs Executive Order Mandating Paid Sick Leave for Federal Contractors

BY G. MARK JODON

President Obama made headlines on Labor Day by signing a new Executive Order that will require federal contractors to provide their employers with paid sick leave. The Executive Order, which will not take effect until 2017, will permit employees working on federal contracts to earn at least one hour of paid sick leave for every thirty (30) hours worked, up to seven days of paid sick leave per year. Another layer of federal regulations is expected to be issued in September 2016 to accompany the Executive Order. According to a White House fact sheet, the paid leave mandate will affect approximately 300,000 workers. It is estimated that approximately forty percent of the private sector employees do not have access to paid sick time. It is expected that contractors will build into their bids the cost of the paid sick leave.

The provision of paid time off has been a rallying cry for proponents of the White House’s “middle-class economics” agenda. States and localities have been steadily enacting paid sick measures over the last couple of years. There are four states (plus Washington, D.C.), nineteen cities and one county with paid sick leave laws on their books. President Obama announced the details of the new Executive Order in Massachusetts, a state whose paid sick leave law took effect on July 1, 2015. The DOL has even created a paid leave resource page, noting that “[c]hange has yet to come to Washington, but momentum is growing in the states.” The White House stated the DOL will soon release a report, “The Cost of Doing Nothing,” that will discuss the “costs to workers, families, businesses, and the nation of not taking action to expand paid family and medical leave . . .” As the DOL paid leave resource page emphasizes, efforts to enact a country-wide paid sick leave bill at the federal level have predictably faltered.

In a letter dated August 10, 2015, encouraging the President to issue the latest Executive Order, Senator Patty Murray (D-WA) and Reps. Bobby Scott (D-VA) and Rosa DeLauro (DCT) called for passage of their sponsored bill, the Healthy Families Act, which appears to be the model for the new Executive Order signed by the President. The Healthy Families Act would require private-sector employers with more than 15 employees to permit each employee to accrue an hour of paid sick time for every 30 hours worked, up to 56 hours per year. The new Executive Order, like the Healthy Families Act, would also permit workers to use their earned paid leave to “care for themselves, a family member, such as a child, parent, spouse, or domestic partner, or another loved one, as well as for absences resulting from domestic violence, sexual assault, or stalking.”

The lawmakers acknowledged, however, that “enactment is unlikely to occur” before the end of the President’s term. The issuance of the Executive Order, therefore, is a way to achieve the same end without congressional approval. Overall, the President’s use of Executive Orders and Memorandums has caused much consternation in the federal contracting community. In a letter dated August 3, 2015, to White House Chief of Staff Denis McDonough and Senior Adviser Valerie Jarrett, four industry groups took issue with the dozen executive orders President Obama has signed affecting government contractors. According to the industry groups, since taking office, President Obama has issued 12 Executive Orders pertaining to government contracting, resulting in 16 new regulations. The industry groups contend the net effect has been to significantly increase the costs of doing business with the government, estimating that nearly thirty cents of every contract dollar goes toward compliance with unique government regulations.


ABOUT THE AUTHOR G. Mark Jodon, managing shareholder of Littler Mendelson’s Houston office, is board-certified in labor and employment law by the Texas Board of Legal Specialization. Mark represents employers exclusively in all areas of labor and employment law. He can be reached at (713) 652 – 4739 and mjodon@littler.com.
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